Elon Musk wins $ 2 billion Tesla shareholder lawsuit accusing him of bailing out his cousin’s solar company

Elon Musk (center) with his cousin and co-founders of SolarCity Lyndon Rive (left) and Peter Rive (right) in 2010.

Elon Musk (center) with his cousin and co-founders of SolarCity Lyndon Rive (left) and Peter Rive (right) in 2010.Mark Von Holden / AP Images of SolarCity

  • Elon Musk won a derivative suit over Tesla’s acquisition of solar company SolarCity in 2016.

  • According to the lawsuit, Musk essentially bailed out SolarCity, but Tesla was in debt of $ 3 billion when it bought SolarCity.

  • According to the ruling, the acquisition process was “far from perfect”, but the price Tesla paid was fair.

When Tesla acquired the solar panel company, the judge ruled that Elon Musk did not act illegally. Solar city In 2016 it was $ 2.6 billion.

The acquisition was initially the subject of a Tesla derivative suit Submitted in 2017 It accused Mask of rescuing SolarCity. This was a $ 3 billion debt when Tesla bought it. SolarCity was founded by Mask’s cousins ‚Äč‚ÄčLyndon and Peter Rive.

When the acquisition was completed, Mask was sitting on both SolarCity and Tesla boards.

so Judgment on page 132 Deputy Prime Minister Joseph Slights III said Tesla paid SolarCity a fair price and Musk did not violate Tesla’s trustee obligations to shareholders.

Mr. Slights said Musk was “more involved in the process than the fiduciary conflict” and the board process was “far from perfect”, but in the end the review process was sufficient.

“Eron didn’t get in the way,” Slights added.

The proceedings are a big victory for Musk. For hooks over $ 2 billion If he loses.

The proceedings filed in 2017 were originally aimed at Tesla’s entire board of directors, but were aimed at other board members. Out-of-court settlement for $ 60 million In January 2020. Only Mask decides to fight the incident, He took the stand In court in July 2021.

Plaintiff’s lawyer, Lee Rudy, The Wall Street Journal They were thinking about their options.

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